by: Grow VC Group
Download PDF
image_pdfimage_print

We’ve written about the API Economy previously and expressed our optimism toward specialization of service providers in the financial services market. It looks like frameworks and proposals being put in place may speed up that development, by forcing uniform standards and requirements on the market. The revised Payment Services Directive (PSD2) may have a long term effect and catalyze the banking sectors position shift to piping from certain high-value services.

In 2013, a revised Payment Services Directive (PSD2) entered the discussion and was proposed by the European Commission with the objective of furthering the services and standards in the original framework. The PSD2 is still not fully set and the discussion is still ongoing, however, there are various elements that are interesting to examine and are being anticipated by service providers in the financial markets.

​PSD2 Mandates an Interface to Core Banking Services

In the framework of PSD2, there are provisions to mandate a requirement for financial institutions to provide access to their core banking services for service providers through an application programming interface (commonly, API). The use case is to allow third parties, with the end users permission, access to certain services using their accounts with financial institutions such as banks. These services may include collecting payment, authentication or verification.

The aim of this interface and more broadly framework, is to bring strong customer protection and efficient fraud prevention standards into play, but the effects on pushing financial institutions into adopt the philosophy around the API Economy may be much more significant than the framework might lead you to believe.

Financial Institutions Anticipating the API Economy

From our work with leading financial institutions around the world, we can see the work on exposing interfaces and making core banking services available already. Take for instance the Spanish Bank BBVA’s API Market platform that’s been rolled out in Spain and the US so far. Similar initiatives are being prepared and launched in various forms of innovation accelerators, internal ventures and new business development teams around the world.

A Global Shift – far Beyond the EU

It may be tempting to think, that frameworks put forth by the European Commission would only have an impact within its jurisdiction. Tempting, but not realistic. Given the interconnectedness of the global financial services sector, new ways of delivering are being prepared and launched all around the world, and strategies are being laid out on how positions are changing in the market. The same characteristics in the market demand that ultimately manifest themselves also in new regulatory discussions and proposals, are what is is driving this shift from Asia the to the Americas.

What Can We Expect?

Through our work with leading banks, we can see the wheels in motion in the background. We can see the amount of investment being made into new cutting edge technologies, new ways of providing services and new business lines being created. We will see banks both lead and get left behind, with the shift to becoming more relevant to the market, the consumer and the service provider longer term being the main focus. Leveraging back and middle office frameworks like the Crowd Valley Digital Back Office is part of this development and in our work, we are fortunate to be able to assist in the migration to the new banking economy with the right balance of efficiency and security for all parties involved.

Read the whole article on Crowd Valley News.

Crowd Valley API

Crowd Valley back office API calls.


Learn More About Grow VC Group Companies

Crowd Valley, Startup Commons, Kapipal, Grow Advisors, TradeUp Fund, Deal Index, Crowdcitee, p2p Safety, Crowd Index Fund, Commoditarian

Join Our Team

We are always looking for talented, entrepreneurial and driven doers to join our growing global group of companies in various positions and locations around the world. If you think you have what it takes, apply now!


Other posts you may enjoy

About the author

Grow VC Group The Grow VC Group is the world leading, global pioneer of securities crowd funding, peer to peer marketplaces, new investment models and global business development. Established in 2009, the Group has developed new investment models on six continents and continues to innovate the global market.

Tags: , , , , ,

This entry was posted on Tuesday, April 19th, 2016 at 6:00 pm and is filed under Business Updates. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.